Golden Gate Bridge at sunrise
-- Golden Gate Bridge at dawn. By Dennis Callahan.

RANDOM JOTTINGS a weblog by John Weidner

Main Page Archive

Natalie Solent
Dave Trowbridge
Betsy Newmark
Bill Quick
Suman Palit
Moira Breen
Andrea Harris
Richard Bennett
Iain Murray
Joanne Jacobs
Craig Schamp
Dean Esmay
Brothers Judd
Doctor Frank
Rand Simberg
Punning Pundit
Right Wing News
Brian Tiemann
Henry Hanks

Iraqi Democracy graphic

Powered by Blogger Pro™

Index to Krugman posts

Index to World War One posts


Saturday, August 31, 2002

Thoughts on war... brick dust in the wind ...

Mark Steyn is really good in a recent column: Don't Dianafy 9/11
... Which brings us to September 11th. In those first moments, no one quite knew what was happening, and so the events themselves set the tone. One plane hit, then another, then the Pentagon was smoking, the White House was evacuated, the towers crumbled, a plane crashed in Pennsylvania, there were other flights missing, there were bomb scares ... For a few hours that Tuesday it felt like the Third World War, and so commentators fell into war mode. And by the time the networks had shuttled Diane Sawyer, Barbara Walters and the other glamorous pain-feelers to the scene it was too late to revert to the banality of "healing" and "closure" and all the other guff of a soft-focus grief wallow...
It's a WAR we're in, and the appropriate memorial for 9/11 would be to turn some terrorist's headquarters into brick dust in the wind...

And I'm not talking about revenge. I care nothing for vengeance. I'm talking about the most moral course of action.

I'm really, really fed-up with the hand-wringers who are agonizing over whether it would be immoral or obscene to "go to war with Iraq."

That kind of thinking is what has got us into this mess. We are at war with Iraq. We've been at war with Islamic terrorists for several decades. They've been making probing attacks for more than 20 years. And each time we fail to react with decisive violence, we have made the problem worse. Even if no Americans were in danger, this would still be morally wrong. Because most of the suffering from the terrorists falls on their own countrymen. Just ask the people of Afghanistan, who got to watch public executions at half-time at soccer games. Those people who are blubbering about the obscenity of war -- I wish I could transport them to Afghanistan of a year ago, and let them see the Night Squads beat someone to death for listening to music, or owning a bird in a cage. That's your peace, and well may you revel in your moral superiority of eschewing war and violence. (And things in Iraq are worse.)

(Actually, they didn't kill people, they wounded them and left them to die slowly, Pol Pot style. Hey kids, what an opportunity !!. If you admire those glorious heros of the 60's Anti-War Movement, join up now and you too can nurture the growth of your own Pol Pots!)

You know what, I care about the people of Iraq. Me, the evil immoral warblogger, I think about them a lot. They are suffering like people suffered under Stalin and Hitler. And I don't believe the anti-war crowd cares a whit about them. I suggest WMD should not be the reason we attack, they should just be a very good excuse to LIBERATE people.

I think the most immoral, the most evil, the most Un-Christian President of recent years was Jimmy Carter. When he allowed Iran to hold our people hostage, he condemned vast numbers of Moslems to death and misery. He sent a big message of encouragement to the very worst elements in a culture where the worst is about as bad as you can get. And a message of discouragement to peaceful moderates in a culture where sensible people are already at a disadvantage. (And Bush senior was almost as bad, blowing his chance to drag Saddam out from under the bed and shoot him.)

And in case you are saying, "It's easy for you to talk, Mr Armchair General, sitting at home and running no risks," I will mention that my son the pilot is dreaming of a military enlistment in the not-too-distant future.

The "morality" of the anti-war crowd is the same sort of 'morality" that agonizes over punishing a criminal, and never thinks at all about the victims, past and future.

Friday, August 30, 2002

P. Krugman
#36: Shin bone's connected to the ankle bone...

"Just Trust Us" (08/30/02) is a towering example of disingenuousness by Paul Krugman. Superficially it appears to be just one of those recycle jobs as he grinds out another column on the cheap. You know, the one we've heard before, about the irresponsible Bush tax cut that's destroying the economy, short-changing hardworking Americans and the poor, and all for the benefit of the rich.

But wait a minute! This time something is missing. The economy is no longer being destroyed!! And if that's not happening, what's the big deal?

Let's back up a minute. Since when did Democrats care a whit about deficit spending? To make a long story short, it all started early in the Clinton administration when the Democrats, after being backed into a corner by Ross Perot during the campaign, had to raise taxes to appear fiscally responsible for the first time in history. To everyone's surprise, especially theirs, the recovery continued, long-term interest rates declined and the economy eventually boomed.

But it also sent Democratic economists, who had been arguing for years that deficits don't matter, back to the drawing board. Two prominent administration economists, Robert Rubin, now of CitiGroup, and Alan Blinder, a professor at Princeton, came up with the answer. Tax increases restore fiscal discipline, fiscal discipline gives lower long-term interest rates and lower long-term rates promote investment and economic growth. If this "shin bone's connected to the ankle bone" approach to economics sounds a little tenuous, it was and is. But, at the time, it served the purpose, and it quickly became Democratic doctrine as well as a leading argument against the Bush tax cut.

Krugman bought into this theory lock, stock and barrel. Here's just one example of what he said in "Fuzzy Math Returns" (10/07/01) about Bush tax cut proposals.

"One key proposal is a permanent new tax break for business investment. This violates the basic principle that stimulus proposals should be only short-term. Furthermore, it would probably have only a modest effect on business investment now, when there is excess capacity; but it would increase long-term interest rates, by increasing both future deficits and future business borrowing. And since long-term interest rates are what matter for housing, on balance this measure might well delay recovery instead of promoting it."
But in today's column this lynch pin theory of Democratic orthodoxy is not even mentioned. How come? Without the doom and gloom of destructively high long-term rates Krugman's arguments are reduced to toothless ravings about who said what and when about the details of budget calculations. The chart below shows Krugman's problem.

Interest Rate Chart

The chart is a plot of long-term yields as reflected by the 10-year Treasury bond. They are as low now as in the early 1960s. Thus, if Blinder and Rubin can argue that a tax increase lowered long rates, then Bush can argue that a tax cut lowered them too.

Who's right? Actually neither. This discussion says more about the bankruptcy of macro-economic theory than anything else. The fact is there are few if any stable relationships in macroeconomics. For example, there are no significant correlations between any of the following: budget deficits, long-term rates, capital investment, the dollar exchange rate, trade deficits and surpluses or economic growth.

In effect, the whole field has been reduced to a battle of anecdotes, usually based on a sample of one event. The death of the Blinder/Rubin doctrine is just the latest casualty of a single-event macro theory. And it has left Paul Krugman up shit creek without a paddle.
He's probably hoping no one will notice. But the Squad is on the case.

_ _ _ _ _ _ _ _ _

She came home in a tow-truck...

It's nice to have Natalie back on the job. I especially enjoyed today her answer to those who pose conundrums over which they think God wll scratch his head in perplexity ...
 ... The question as to the souls of twins is fascinating, but not any more of an obstacle to belief than the question as to the point at which any soul begins. (That being the question, you will recall, that I could not answer.) God's book-keeping, however it is managed, does not slip up; he already sees the lives of those twins in their entirety...*
*To see from a standpoint outside time is not to control. They still have free will.
The question of free will is itself an example of that sort of "conundrum," and I'm glad to see she's not taking any guff about it.
_ _ _ _ _ _ _ _ _

I had't thought about this...

Some people are huffing and puffing and shouting, "What are we waiting for? Why is Bush fiddling while Rome is about to burn?" This, from the Federalist Newsletter, may be why:
 ... We suggest that "devastating" is an understatement. Though the Pentagon briefing mention above did not explicitly state Saddam already has a small nuclear arsenal at his disposal, our reliable analytical sources in the intelligence community have confirmed what The Federalist has speculated since mid-July -- a critical body of highly corroborated intelligence estimates entered the "regime change" equation in June, and have considerably altered our military options. Ironically, while the U.S. strategic objective has been to protect our national interests from Jihadis supplied by Saddam's WMD programs, it is precisely that threat -- new intelligence that strongly suggests Saddam already has completed operational nuclear devices, possibly suitable to be deployed as short-range warheads -- that has the administration doing precisely what President George Bush declared last week -- being "very patient and deliberate" and "considering all technologies...and intelligence." ...

_ _ _ _ _ _ _ _ _

P. Krugman
#35: The truth is staring him right in the face ...

In "Mind the Gap" (08/16/02) Paul Krugman displays the biggest gap of all–his complete misunderstanding of the differences between the U.S. and Japanese economies. Let's begin with his four-point checklist of U.S. economic strengths he thought until recently would allow the U.S. to avoid a Japanese syndrome.

1. The Fed has plenty of room to cut interest rates, which should be enough to deal with any eventually.
2. The U.S. long-term budget position is very strong, so there is plenty of room for fiscal stimulus in the unlikely event interest rate cuts aren't enough.
3. We don't have to worry about an Asian-style loss of confidence in our business sector, because we have excellent corporate governance.
4. We may have a stock bubble, but we don't have a housing bubble.

Now he says he's had to strike the first three strengths off the list because they have been dissipated by the Bush administration and he is worried about a housing bubble. We won't comment on housing, but on the other three points he is dead wrong. Of course there is room for further Fed rate cuts. Krugman has been advocating exactly that himself in recent columns. There is also room for fiscal stimulus if needed. Long-term interest rates are near their lowest point in years. But it's on the third point, concerning corporate governance, where he is really out to lunch.

Despite all we've been through recently involving outrageous business scandals, it should be stressed that there is more to the scope of corporate governance than a few lawless scoundrels in Houston. Corporate governance includes the capital markets, the exchanges, the regulatory and legal regimes and the broader social philosophy in which American capitalism functions. As a general rule in this country we deal with business failure fairly harshly. We let the markets decide and the retribution is often swift and brutal for all involved. Just ask the shareholders and employees of Enron, Global Crossing and WorldCom. This rough and tumble approach, however, has one supreme advantage–it clears away debris quickly and promotes an early recovery. Our shared philosophy on corporate governance is that mistakes are a price to be paid for a progressive, innovating American economy. We pay that price by imposing and taking our lumps quickly and moving on.

Krugman, of course, does not buy any of this because he's not really a capitalist. He's more of a statist who cannot imagine a free market solution that could not be improved upon by another federal regulation or another law. And this brings us back to Japan. While Krugman is pissing and moaning about the evils of our capitalist system as revealed recently by Enron,–screwed shareholders, broken pensioners and laid off employees, etc.–the alternative approach in Japan is staring him right in the face. And he refuses to see it.

In Japan they cannot pull the plug on anything. The manipulation to keep failed companies afloat is so intense that the finance minister recently referred to the stock markets as "gambling dens." (see the WSJ article 08/28/02). There is even a name for such companies–zombies (companies of the living dead). Public confidence in stock markets is below 20 percent. Even worse, the banking system has been drawn into the morass with billions in non-performing loans on their books.

So if Krugman really wanted to discuss why the U.S. is not likely to have a 10-year recession like Japan, he would begin here. But he won't. It would contradict almost everything he has ever written.

_ _ _ _ _ _ _ _ _

P. Krugman
#34: Trying to "Enronize" Cisco!

"Clueless in Crawford" (08/13/02) is "classic Krugman" in the use of guilt-by-association and character assassination to make a point. But what is the point? That stock options should be expensed? It's really hard to say based on the ravings in this column.

But poor John Chambers, CEO of Cisco Systems, is the de facto target of Krugman's wrath and comes across as little more than a felon at large. His only offense, as far as we can tell, was appearing with Bush at an economic forum in Waco Texas.

Cisco is a premier developer, producer and supplier of internet hardware. The difference between Cisco and Enron is the difference between a real company and a house of cards. Krugman obviously cannot tell the difference now anymore than he could decipher Enron's fake trading floor then when he was a paid member of their advisory board.

He's now trying to "Enronize" Cisco by arguing that any business practice used by Enron, e.g., issuing employee stock options or using stock to finance acquisitions, is automatically questionable if not illegal. As a crescendo he notes that while "nobody from Cisco management has been arrested..…. neither has anyone from Enron." Only later does he concede, "what Cisco did was definitely legal. He then goes on to argue that what ever they did should have been illegal and only the Bush administration's intransigence stood in the way.

As a final shot at Cisco he notes derisively that they still do not expense employee stock options. Guess what? Neither does the New York Times!

What a jerk!

Thursday, August 29, 2002

P. Krugman
They're baaack! With a backlog to entertain you. Here's #33: The Lost Continent.

The only word to describe "The Lost Continent" (08/09/02) is pathetic. Paul Krugman used to be a leading economist in international trade and finance. Now, to fulfill his NYT role as attack dog for the Democrats, he is reduced to attempting partisan shots at the Bush administration over such banal issues as its position on an IMF loan to Brazil.
It's the usual Krugman bullshit. On the one hand, he's for the loan because U.S. "interests" in Brazil are at stake. On the other hand, he feels a certain PC "queasiness" because the holders of those interests, and hence the beneficiaries of the loan, include FleetBoston and CitiGroup. Who did he expect we wonder? Jesse Jackson's Rainbow-Push?
His fear apparently is that these benefactors will show their appreciation to Republicans with campaign contributions from the Wall Street elite in the next election. What rubbish!
Did benefactors of the Mexican bailout in 1994/95 show their gratitude by contributing to the Democrats? Would Krugman have cared if they did? Anyway, the last time we checked, Sandy Weill and Robert Rubin of CitiBank were limousine liberals.
The reason we described this column as pathetic is that Krugman has all the tools and intellect to say something useful about developing country bailouts. But as long as a swipe at the Bush administration is an obligatory part of the formula he will never get it done. It's a shame.

Tuesday, August 27, 2002

slogging, not blogging...

Not much to say lately; Charlene and I have both been madly busy. We both had lots of work on our plates, and then had big new projects heaped on top. Are we making money? Naahh. Payoff is always somewhere in the future.
But I'll be back. As Andrea said recently:
... me, quit blogging? With so many members of the human race needing to be mocked and villified? Nuh uh. It's a public service, this blog is ...

Sunday, August 25, 2002

Woodlief's words

A lot of people have mentioned Tony Woodlief's post Debate, Academy-Style. I appreciated this bit especially:
...There's a common thread here: many people to the political left seem to enjoy making little jabs at their favorite targets (Christians, America, free markets, etc.), but are quick to hide behind walls of decorum and appropriateness when challenged. In short, they behave like intellectual cowards. They parade their insipid opinions in front of captive students, toss out their views in safe domains, and scurry like mice when they discover there's a thinking person standing in the corner with a broom in his hand.
Little jabs. That's so true. Put forth like trifling little commonplaces that it would be boorish to challenge and immature to take personally ... And there was another good line in Tony's piece:
...the Naval School professor noted that, not being at a university, she was free to continue her research and work without censorship.

Think about that. A scholar cites not being at a university as her protection against censorship. And many of us who have spent significant time in universities would probably agree with her sentiment...